data-and-cloud-computing — Technology

The European Data Strategy Aims High, Yet Falls Short of Its Objective

European Commission unveils strategy for unified "data space," a digital market for data with uniform European rules for data processing and infrastructure, aiming for enhanced data sharing across EU borders. While the objective is commendable, the successful execution remains a challenge.

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2025 September 13 . 3:16 AM

2 min read

Aim of EU Data Strategy is Commendable, Yet Falls Short of the Target

The European Data Strategy Aims High, Yet Falls Short of Its Objective

The European Commission has proposed a data strategy that aims to create a common European "data space," a digital single market for data. This strategy, if implemented, could revolutionise the way data is shared and utilised across the EU.

The proposal calls for the creation of "personal data spaces" and expansion of data portability requirements. However, it offers few details on who would provide these spaces or whether consumers would use them. The success of EU companies could depend on cross-border data sharing and secure infrastructure, which U.S. cloud providers are often best equipped to provide.

The EU data strategy also suggests making it easier to share commercial data in nine different sectors, but this could conflict with the GDPR, particularly in the financial and healthcare sectors. Separating personal and non-personal data can be costly for companies, and clarity on the EU's plans to mobilise sufficient funding for the data strategy is essential. Companies need to know how funds will be divided and whether ongoing maintenance costs will be covered.

Building a European cloud is a protectionist project that may make it harder for non-EU companies to sell to the EU. The strategy asserts that the EU needs cloud providers owned and operated in Europe, but storing data within a country's borders does not necessarily make it more private and secure. Non-EU cloud providers must still comply with EU laws.

The strategy also calls for regulators to mandate data hubs, assuming the private sector is failing to sufficiently share data. However, this is not always the case. In the U.S. agricultural sector, successful private models enable farmers to share data, and in the pharmaceutical research sector, companies have begun sharing historical clinical trial data with outside researchers, including competitors.

The EU data strategy requires funding of €4 to 6 billion, according to the European Commission. However, the approval of the new EU budget has been delayed, making the funding of the data strategy challenging. The proposal fails to account for the cost and feasibility of creating personal data spaces, and the search results do not provide specific names of companies that have financially supported the EU Commission for implementing the EU data strategy.

The strategy should aim to rally the participation of both EU and non-EU stakeholders and should not impose more costs on companies. The EU should simplify existing rules to ensure legal certainty for both users and companies and amend data portability rights to account for the costs and technical difficulties they involve. Data portability can deter companies from collecting and storing data due to the requirement to provide users access to large, complex, and disparate data sets in a reusable format.

All major U.S. cloud providers have data centers in Europe and offer customers the option to store their data in Europe. Despite the challenges, the EU data strategy presents an opportunity to create a more integrated and competitive digital market in Europe. The success of the strategy will depend on its ability to balance the need for data localisation with the benefits of cross-border data sharing and secure infrastructure.